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Friday, April 3, 2009

En Bloc Sale Of Horizon Towers Falls Through

Source : Channel NewsAsia, 02 April 2009

A group of homeowners has finally won the fight to keep their condominiums, ending a two-year legal saga.

In an unprecedented move, the Court of Appeal has ruled in favour of owners who objected to the S$500 million en bloc sale of Horizon Towers. The Leonie Road condominium was to have been sold in 2007 to Hotel Properties and its partners.

Had the en bloc sale gone through, owners of its 199 units would have earned S$2.3 million each, while 11 penthouse owners would have received about S$4 million each.

In its judgement, the court said the Strata Titles Board, which approved the sale, had not done enough to investigate when objections were raised.

It also said that the sales committee was not transparent when it did not pursue a higher possible price offered by another buyer.

The lawyer, acting on behalf of the minority owners, said the judgement enhances existing laws which require sales committee members to be more transparent.

Philip Fong, partner, Harry Elias Partnership, said: "This particular judgement actually deals with specific aspects such as if there's a potential conflict of interest, when sales committee members have owned additional units – should they disclose or not disclose that fact.

"The fact that there's a higher offer and there are changing market conditions, should they go back to the subsidiary proprietors? All these make it very clear that the committee is to act in the interests of all subsidiary proprietors and not the majority."

When asked how they feel about the outcome, a spokesperson for the majority owners said it is not a case of whether they are happy or unhappy, but it is a decision they have to honour.

Channel NewsAsia understands that some homeowners have spent up to S$30,000 each in lawyers' fees.

Market-watchers said the outcome would affect homeowners who might have purchased other properties. These owners are still likely to be able to sell their units, but at a marginally lower price of about S$800 per square foot, compared to the S$850 per square foot agreed in the en bloc sale.

Observers said the case and the Court of Appeal's unprecedented decision will set a benchmark for other similar cases in the future. - CNA/so